What is Application Portfolio Scoring?
Application portfolio scoring is a process used to evaluate and prioritize technology investments within an organization. It involves assigning a numerical value, or score, to each business application based on certain criteria, that make up the business application criticality score.
Business application criticality refers to the importance of a business application in relation to the overall operations and goals of an organization. Some business applications are considered more critical than others, as they play a vital role in the functioning of the organization and the achievement of its goals.
Determining the criticality of a business application is important because it helps organizations prioritize their technology investments and allocate resources accordingly. For example, an organization may choose to allocate more resources to a critical business application that is essential to the functioning of the organization, rather than a non-critical application that is not as important.
Business application criticality can be evaluated based on various factors, such as the impact on the organization, the level of risk involved, and the resources required to maintain and support the application. For example, a business application that supports the organization’s core business processes may be considered more critical than an application that is used for a non-essential task
There are four steps involved in the application portfolio scoring process:
- Define criteria: The first step is to define the criteria that will be used to score the business application. These criteria may include the potential impact on the organization, the level of risk involved, the resources required, and the potential return on investment.
- Assign weights to criteria: The next step is to assign weights to each criterion, based on its relative importance to the organization. For example, the potential impact on the organization may be given a higher weight than the level of risk involved.
- Score each application: Once the criteria and weights have been defined, each application is assigned a technology score and a business score based on predefined criteria. The score for each application is calculated by multiplying the weight of each criterion by the value assigned to that criterion for the project.
- Compare scores: The scores for each application are then compared to determine which application should be given the highest priority. Applications with higher scores are typically given higher priority and allocated more resources.
There are also four benefits to using application portfolio scoring:
- It helps organizations prioritize technology projects: By assigning scores to each project based on specific criteria, IT portfolio scoring helps organizations prioritize technology projects and allocate resources accordingly.
- It helps organizations make informed decisions: IT portfolio scoring provides a clear, quantitative analysis of the potential impact, risk, and resources required for each technology project. This helps organizations make informed decisions about which projects to invest in.
- It helps organizations align technology investments with business goals: By prioritizing technology projects based on their potential impact on the organization, IT portfolio scoring helps organizations align their technology investments with their business goals.
- It helps organizations track progress: IT portfolio scoring allows organizations to track the progress of technology projects and adjust as needed.
In conclusion, application portfolio scoring is a valuable tool for organizations looking to prioritize and allocate resources to technology investments. It helps organizations make informed decisions, align their technology investments with their business goals, and track progress. By using IT portfolio scoring, organizations can optimize their technology investments and achieve their business objectives.